Team AckoJul 22, 2021
If you are a bike owner or planning to be one, you must have heard of the importance of two-wheeler insurance. Insuring your bike is a legal requirement in India. The extent of insurance is subjective—you can buy a policy just to comply with the law of the land or purchase a wide-ranging cover that not only meets legal requirements but also offers financial assistance in case of bike-related unfortunate incidents. But what about cancelling such a policy? You also have the option to cancel a bike insurance policy and get a refund in certain situations.
Just as you must follow a process to buy a two-wheeler insurance policy, you must also follow a process to cancel one. This process might differ from one insurance company to another. Read ahead to know all crucial details related to cancelling a bike insurance policy and getting the applicable refund for it.
The traditional way to cancel a bike insurance policy is to write an application to the insurance company about your intention to cancel the policy. The application needs to be supplemented with the required documents. However, with the emergence of digital-first insurers, the traditional paper-bound process has undergone a rapid transformation.
Nowadays, you can initiate the policy cancellation process by sending an email or by calling the insurer. Some insurers might also have a webpage dedicated for cancellation and refund where the process is automated.
If you are wondering—can I cancel my motorcycle insurance after a month from the purchase date, then the answer is yes. The answer will remain affirmative even for cancelling before the start of the policy, after the beginning, or during the policy period. Thus, you can cancel bike insurance anytime and get a refund. However, there are some terms and conditions.
You must comply with the requirements of the insurer regarding policy cancellation and refund. This includes stating the reason for cancellation and supporting it with necessary documents. For example, if you are cancelling the current plan and buying another one, you must show that you have already purchased a new policy.
There can be several reasons for bike insurance cancellation. Whatever your reason to cancel the policy, you must convey it to your insurer in a clear manner. Here are some of the common reasons why one might feel the need to cancel an active two-wheeler insurance policy.
Why would anyone want to insure an asset they no longer own? Therefore, it makes perfect sense to cancel your policy if you are selling your two-wheeler. You have the option to transfer the policy to the new owner as well, provided the new owner wants to continue with the policy over choosing a new insurer. Convey your decision to the insurer and follow the process stated by them for smooth policy cancellation and refund process.
Bike theft is an unfortunate event—an unbearable mental loss. You can cancel your policy by letting the insurer know about the bike theft. Mostly, they will need the First Information Report and the Non-traceable Report from the police officials; however, the process might vary on a case-to-case basis. If you have a Comprehensive policy and you raise a claim for bike theft, the insurer might cancel the policy after settling the claim.
You might want to shift to a different insurer during the policy period due to an unpleasant experience with the current insurer. Such a change can also be because of the availability of a better insurer that offers the policy at a lower rate. However, such types of cancellations are rare during the policy period.
Usually, people wait for the policy period to end and then renew the policy from a different insurer. But if they have a long-term policy in place and do not want to associate with the insurer for that long, then people might go for such a switch irrespective of the policy period.
Since a bike insurance policy is a mandatory requirement, you need to submit the new insurance policy’s copy to the previous insurer to cancel the previous policy. This is done to ensure that you are covered under a policy before the previous plan is cancelled.
People can find themselves in unusual situations. For example, a person might renew a Comprehensive bike insurance plan from a different insurer a month before the current policy’s expiry date. Before the expiry date, the person might change his mind and continue with the same insurer and cancel the newly purchased plan, which had not yet become operational.
As mentioned above, different insurers might have their own processes concerning how to cancel insurance policy online and get a refund. The following section showcases a generic policy cancellation and refund process.
Step 1: Send an email to the insurer stating your desire to cancel the policy. Mention your policy number and state the reason for cancelling in the email.
Step 2: Depending upon your cancellation reason, the insurer will ask you to share the required documents.
Step 3: The insurance company will verify the documents.
Step 4: If verification is unsuccessful, the insurance company will convey the same and state the next steps.
Step 5: Upon successful verification, the insurance company will cancel the plan and share the refund amount as per their terms and conditions.
Policy cancellation and receiving the refund are two separate processes. They are interrelated but successful policy cancellation does not guarantee a successful refund. The insurer will refund the amount on a pro-rata basis after stringent verification and complete terms and conditions adherence.
If there is a claim involved, the refund process becomes more tedious. However, if you have a valid reason to cancel the policy, have documentation in order, and comply with the insurer’s requirements, you shouldn’t face any hurdles during the refund process. Here are some important points regarding the refund process.
If you cancel your bike insurance policy before the policy’s start date, it is highly likely that you will receive a full refund—a marginal cost can be charged for operational purposes. A full refund is possible here because the policy coverage hasn’t begun and the insurance company did not have to face any potential risks during the period.
If you cancel the policy after the start of the policy period, the insurance company will calculate the premium on a pro-rata basis. This is because the company had offered coverage for the period before the cancellation request.
There is no standard refund timeline followed across insurers. However, if all things are in place then the refund should be initiated within two weeks.
If you are not comfortable with your current insurer, you can wait for the policy period to end and purchase a new two-wheeler insurance policy. This way, you will not have to go through the process of cancelling a policy and getting a refund. But if you feel there is no point in waiting, then look for new bike insurance online and cancel the policy at once.
Keep these things in mind while looking for a new bike insurance company:
Go through the policy’s fine print.
Check out social media reviews of the company.
Visit the website and the policy webpage to have a look at the features in detail.
Speak with friends and family regarding the company’s claim settlement reputation.
The insurer should offer a wide-ranging cover at an affordable rate along with superior service.
The cheapest plan might not be the best in terms of coverage and service. Verify before buying.
Digital-first insurers offer plans at incredibly low rates because of lower operational costs.
The following section presents some commonly asked questions regarding policy cancellation and refund.
Can I cancel a bike insurance policy purchased from an offline mode and switch to a policy purchased online?
Yes, such types of changes can be made.
Do all insurance companies offer a full refund upon cancellation?
Whether an insurer offers a full refund on policy cancellation or not will depend upon their cancellation application and its complexities, the terms and conditions, and the insurance company’s processing charges.
Can I cancel the Comprehensive coverage of the policy and keep the Third-party Liability aspect of it?
Such type of cancellation is usually not permitted, as these are two separate policies.
Where can I read more about Acko’s Cancellation and Refund policy?
You can read about it by visiting Acko’s Cancellation and Refund Policy page.
I have some specific doubts regarding bike insurance policy cancellation and refund. What should I do?
You can write an email to [email protected] for specific queries on bike insurance.
Can the insurer cancel my bike insurance policy?
Yes, the insurance company has the power to cancel a policy on the grounds of non-disclosure, misrepresentation, and other such acts.
My name is mentioned incorrectly in the policy. Should I cancel it and get a new one?
There is no need to cancel your policy in such a situation. You can simply raise an Endorsement Request with the insurance company and they will rectify the error. Once done, they will share the updated policy with you.
What will happen if I buy a second-hand bike, do not opt for the seller’s insurance policy, and do not purchase a new policy?
If you are riding a bike on Indian public roads, you must own an active bike insurance policy. Not doing so is a punishable offence.
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